Friday, July 22, 2011

McDonald’s Net Income Grows 19%

McDonald's reported higher than expected earnings for its second quarter, driven by strong global growth. Comparable sales and store traffic increased across all segments, the fast-food giant said. Shares jumped 2.7% as a result.

Net profit was $1.4 billion, or $1.35 per share, up from $1.2 billion or $1.13 per share in the year-ago quarter.

Analysts were expecting profit of $1.28 per share on revenue of $6.6 billion.

Operating income grew 34% in the Asia/Pacific, Middle East and Africa segment, led by strong sales in China.

Robust performance in France, the U.K. and Russia led to a 24% increase in Europe (19% excluding currency impacts), and in the U.S. operating income grew 6%. New items like the strawberry lemonade and fruit and maple oatmeal were among the most successful in terms of domestic sales, the company said, along with McDonald's core products, the Big Mac and the Chicken McNugget.

"I am pleased with our second quarter performance and confident that the united efforts of our owner-operators, suppliers and employees will drive profitable growth for our shareholders over the long term, despite the continuing challenges of our economic environment," said McDonalds CEO Jim Skinner. "As we begin the third quarter, our momentum continues with July global comparable sales expected to be between 4 and 5%."

The company said it returned $1.4 billion to shareholders in buybacks and dividends during the quarter.